Where are the real Bitcoin users’ understanding of core values? Analysis from the perspectives of anti-censorship, inflation and settlement.
Original title: “Viewpoint丨Bitcoin has broken new heights, what is its core value? 》
Written by: Hasu
Translation: Li Hanbo
In his article “The Existential Crisis of Bitcoin”, Nic Carter described the inherent identity problem of Bitcoin. Because no one has the power to give decentralized systems an identity, they rely on a set of practical core values as a consensus.
You can think of these core values as the consensus of all people who own Bitcoin. I tried to formalize them in “Interpreting Bitcoin’s Social Contract”-but it should be noted that any such attempt must be It is highly subjective.
When people disagree about what Bitcoin is or should be, it affects the real world in two different ways. For one, there is a self-evident rule that if almost all important stakeholders are satisfied with the proposal, the agreement will not be updated. When people disagree on basic principles, no major proposal can be passed unanimously. We call this type of agreement “protocol rigidity”. Today, most people seem to have no problem because: (1) Bitcoin does not need to change much from here; (2) This resistance to change is seen It is a valuable attribute that makes it different from the centralized systems of the past.
But there is also the risk that there are some external events that require Bitcoin to change, whether it is in response to an attack or bug, or it cannot be marketed. In this case, as the community splits into opposing parties, the same governance deadlock will soon become an existing problem.
Standoffs can last for a while, but eventually they will reach a critical point. In Bitcoin, this is the collision of “Bitcoin is a means of payment” and “Store of Value”. In Ethereum, the collision of “Code is Law” and “Social Consensus is Law” is also the case. Both parties also have credible claims, because there is no central party to “balance” their differences. The only way to resolve these conflicts is to reach community consensus in various ways, but in some cases it is permanent community division.
The biggest problem today may be how to solve the incentive problem that may be caused by the decline in block subsidies, and how Bitcoin should protect privacy in the case of more and more blockchain monitoring. Nic and I tried to illustrate the confrontation between these and other views in our article “The Bitcoin Vision”.
As Nic said, “Systems with more internal consistency and more universally agreed value sets are more capable of sustaining.” This shows the optimal social contract
- There are very few rules (include as many people as possible)
- Despite the system’s problems, the people are still highly conscious.
In today’s article, I would like to discuss where real Bitcoin users drew a line between core values, where their logic may reveal potential collisions, and all these comparisons. What does the future of Bitcoin mean?
Introduction to this survey
To explore this topic, I used a basic questionnaire to ask my Twitter fans what they think is the core value of Bitcoin. The way I conceived the question was to ask the opposite question-what changes or events would make Bitcoin no longer a Bitcoin to them? The meaning here is that users will be troubled enough to sell their coins and leave the project.
All questions can be summarized into these five main topics:
- Anti-censorship
- Third party
- Currency inflation
- Settlement guarantee
- Means and purpose (more on that later)
Anti-censorship
When your level of agreement is reviewed, is Bitcoin the same as before?
When the level of agreement of others is reviewed, is Bitcoin at this time the same as before?
The first topic I asked was censorship resistance, which has always been one of the core content of Bitcoin social contracts. In fact, the result is as I expected. People really value the anti-censorship feature, whether it is for themselves or others, it may be unreasonable in the eyes of bystanders. After all, people will not stop using Paypal because Paypal has removed legitimate arms dealers or political dissidents, nor will they stop using it because Twitter has censored many conservative media organizations or politicians.
This can only show that Bitcoin actually has a social contract. If censorship occurs in Bitcoin, people feel that the infringement is more unacceptable than in other systems, because in other systems, people may have begun to expect censorship, even if they themselves Not affected.
In fact, the design of Bitcoin makes the censorship very unattractive, because if one miner does not package your transaction, the next miner may, so in the long run, they will make more money. Unless a miner (or alliance) controls more than half of the network, some blocks may not be packaged. If an attacker can credibly intimidate other miners and prevent them from putting transactions or addresses on a public blacklist, it can also work when controlling less than half of the network (see “Feather Fork”).
Users stated that they would not accept other people’s seizures. This fact is actually very important if counter threats can make miners who follow the Fork of Feather unprofitable. This is also a rebuttal to the popular argument that only transaction fees and not block subsidies can protect Bitcoin from censorship, because attackers will also lose business from uncensored parties.
Third party
If censoring people’s use of Bitcoin, there may really be only two ways. 1) Miners are at the consensus layer, 2) Trusted intermediaries are at the application layer.
Bitcoin is often said to remove the so-called trusted third party, but this only applies to situations where users interact directly with Bitcoin. If most of the activities happen through a trusted third party, we can see that the same basic de-trusted assets are encapsulated in a trusted wrapper, which ultimately leads to the failure of the decentralization principle. For a thought experiment on why third parties are a big risk for Bitcoin, please see “Why Bitcoin May Not Survive Under Bitcoin Standards”.
If L1 and any trustless L2 will make you unaffordable, the only option is to connect through traditional banks, then what is Bitcoin or Bitcoin?
Given that Bitcoin players have pointed out the weaknesses of gold, I expect people to have a low tolerance for fully centralized Bitcoin. Unfortunately, I was surprised how many people would agree with this. Maybe they are just pragmatic, because Bitcoin really can only support so many base layer and LN transactions, and then the higher fees are not friendly for small transactions
Having said that, there are good reasons to show that concerns about Bitcoin’s centralization may be overstated, and Bitcoin may perform better than gold because of its unique advantages. Because Bitcoin is a digital bearer asset, anyone anywhere in the world can create a new Bitcoin bank without having to comply with local regulations. And why intermediaries will still be trusted? There will be more competition between them, which puts customers in a better position and protects incumbents from interference than supervision. Since Bitcoin can be transferred so easily, it will also make it easier for customers to switch between different intermediaries, further reducing exit costs.
Although people are generally skeptical of other non-Bitcoin blockchains, compared with the black box of traditional banking, Bitcoin users also seem to appreciate the benefits of blockchain in terms of transparency and effectiveness.
If more than 90% of the tokens are tokenized in the public blockchain, is Bitcoin still Bitcoin?
I think this trend is likely to continue, because we will see different trust models, from completely trustless (TBTC) to guaranteed by most hash power (Drivechain) to guaranteed by consortium (Liquid) to single escrow People guarantee (BitGo) for users to choose.
Currency inflation
Asking my friends about Bitcoin inflation on Twitter always attracts attention. Therefore, I thought that this dislike of inflation would be reflected in the reply, but the results came out quite surprised me.
I asked “accidental inflation” first…
If a loophole causes the current supply to inflate by 1 million BTC, and there is no reasonable way to return to the chain, then what Bitcoin is still Bitcoin?
The second is the kind of artificial inflation that is often mentioned. If the L1 fee income is insufficient, this method is used to pay the miners.
With 0.1% perpetual inflation, is Bitcoin still Bitcoin?
It seems that if it is accidental inflation-even large inflation (total supply + 1m!), many people are willing to accept it, but artificial inflation is far from tolerable.
This is worth discussing because it may seem irrational from the beginning. With a currency inflation rate of 0.1%, it will take 48 years to create the same 1 million BTC. However, more people would rather reject a Bitcoin version with a little tail inflation than accept a Bitcoin version that immediately owns the same 1 million BTC version of. Even if tail inflation makes Bitcoin more secure, accidental inflation will not!
We know that many people in Bitcoin value scarcity and Bitcoin’s 21 million cap, but they seem to be very pragmatic. If a bug swells the supply, the damage has already been done, and—assuming the bug is fixed—this doesn’t necessarily make another bloated bug more likely. And if we deliberately agree with inflation, it may make people feel more like a betrayal of core values rather than a mistake in implementation.
One thing that often upsets me is people’s obsession with currency inflation, not price inflation. The first is the increase in the supply of bitcoin, and the second is the decline in the purchasing power of bitcoin. The reason why it looks so short-sighted is because supply inflation ignores half of the market-the demand side of Bitcoin! The reasons for these two aspects are both to meet the needs of Bitcoin.
Let’s do a very simple thought experiment for everyone. If only supply inflation needs to be optimized, we can change the agreement and stop issuing more coins from tomorrow. But the purpose of Satoshi Nakamoto’s release schedule is not simply to limit supply inflation, but
- Let more people have the opportunity to buy or mine Bitcoin,
- Before the block space market matures, give miners an incentive to maintain the security of the network.
Bitcoin without block subsidies is insecure today, and its price is likely to be shaken by this insecurity. This in itself proves that supply inflation has a positive effect on prices and thus on the purchasing power of holders. It just depends on the market’s emphasis on sustainability and long-term predictability.
As a rebuttal to my paper, I would like to quote Nic’s paper again, that is, the social contract should be as simple and consistent as possible. “We should optimize the price of Bitcoin” is the actual behavior of most people, but it is much more abstract and subjective than “We should keep Bitcoin from supplying inflation”. So, perhaps in practice, the best way is to tend to limit supply inflation, rather than price inflation, which is a less accurate and useful, more objective and verifiable option.
Settlement guarantee
Let’s talk about the settlement guarantee of Bitcoin. I am very interested in the response we will get. Not only because I have had a great debate with the Bitcoin community on this topic, but also because, unlike inflation or censorship, settlement guarantees are something that everyone who trades with Bitcoin can directly experience.
If there is no reasonable time to determine in the end, is Bitcoin still Bitcoin?
More than half of the respondents believe that Bitcoin, which takes a few days to settle, is no longer useful. I do think this is a blow to the popular argument that miner rewards will never be too low in the future because users have to wait for many blocks to settle (proposed by Nick Szabo and others). This argument ignores that Bitcoin is in a competitive market. Although it can withstand worse efficiency in exchange for better scarcity and censorship resistance, there is a limit to how much it can lose.
In other words, there are more people who choose uncertainty than any other question, indicating that uncertainty is high.
If some users are occasionally attacked by double spending, is Bitcoin still Bitcoin?
About half of the interviewees think that double-spending attacks are a serious problem, which is reasonable under a system that values property rights above all else. But if we think about it, the double-spend attack is basically like a refund or a reversal of a credit card transaction. Some people’s credit card transactions are refunded, does it mean that this system is useless, especially considering that users themselves will basically not become victims, only exchanges and large merchants will become victims?
Perhaps the logic we discussed in the context of resisting censorship is also applicable here, here-unlike credit cards-the purpose of bitcoin transactions is “ultimately final”, so any violation is more like an attack on the entire system .
Nevertheless, the other half of the respondents will continue to use Bitcoin, even if there are occasional double-spending attacks, I think this is a healthier attitude. If Bitcoin users want to be absolutely safe from such attacks, then this means Writing:
They will have to spend more money on security instead of accepting Bitcoin that is occasionally attacked by double spending. According to the development of the block space market, this view may eventually conflict with the “non-inflation” view. In this case, one of them will have to be lost, and community division may occur. If we want to prevent this from happening, relaxing your standards and supporting a “smaller evil” can sometimes help a lot.
Users must be prepared to reject more attackers under social coordination. To do this in an effective way, it is necessary to establish procedures and hierarchies (think: leadership) to reduce the social scalability of the system.
In summary, I think that users’ preference for fast and reliable settlement and their preference for no currency inflation are most likely to conflict.
Means and purpose
At the end of the questionnaire, I deliberately asked about other aspects of Bitcoin, which are not related to the core value of Bitcoin. The goal here is to see whether people can recognize the difference between the goals-our goal for Bitcoin as a system-and the mechanisms (means) to achieve these goals.
If there is no proof of work, is Bitcoin still Bitcoin?
Perhaps the biggest surprise in the entire questionnaire, almost more people took a clear stand on “Bitcoin has a proof of work” rather than “Bitcoin has a fixed supply.” As I have discussed many times before, I think Bitcoin is a set of goals and shared rules, a social contract, and we build software to automate this social contract. In 2008, Satoshi Nakamoto identified proof of work as a key part of solving this problem. But this does not mean that proof of work itself is one of these goals or core values of Bitcoin.
Source: Interpretation of Bitcoin’s Social Contract (Social Contract)
Rather, proof of work is a mechanism to achieve two specific goals.
- Trustless distributed time ledger
- Initially distribute coins in a fair and trustless manner
If there is any other mechanism that succeeds in achieving these goals better and can withstand the test of war like PoW, or if PoW is found to have major loopholes, then I will not object to its replacement. But perhaps the community’s position on the PoW mechanism is much firmer than any other mechanism. This is not surprising, because – as more and more PoS (Proof of stake) networks are launched, people do not want to give the enemy anything reason.
It should be noted that I don’t think Bitcoin has anything to be afraid of. Purely speaking, Bitcoin does not need to be afraid of PoS coins, but supports the arguments for PoS (greener, no risks from China, attackers Can be identified and punished) has a powerful appeal, I think most Bitcoin players will pay attention to this at least subconsciously.
If there is no current 2.3MB block size limit, is Bitcoin still Bitcoin?
If there is no current core development team, is Bitcoin still Bitcoin?
As for the other two questions, your answers are more in line with my expectations. Everyone agrees that the current block size limit or the current core development team is not a “means”, but the implementation of the core value of Bitcoin into the technical agreement. purpose”.
For example, the block size limit is to ensure that Bitcoin’s use of full nodes is still affordable. They must verify the history of the entire blockchain and then keep pace with all incoming blocks. In addition, with the reduction of block subsidies, it is also important to ensure the scarcity of block space. Therefore, the transaction needs of users lead to sufficient fee income for miners.
Bitcoin’s veto-style governance
What I really want to point out is that on every issue, there are many people who have a clear position and say, “This is not Bitcoin to me.” On the one hand, this confirms that we have indeed correctly identified the core value of Bitcoin. On the other hand, this also explains well why
- Little progress has been made in the development of the Bitcoin protocol (it is too difficult to reach consensus on anything).
- It is difficult to introduce potentially dangerous changes in Bitcoin. The latter makes Bitcoin very reliable for businesses and developers and can be developed on this basis.
Source: Twitter
Of course, the answer here does not necessarily explain how someone will vote with their wallet in the end. I suspect that – compared to everything else, Bitcoin players who insist on using BTC in the expansion battle are more concerned with as many other people as possible. Reach a consensus to protect the network effect of Bitcoin.
If you are like me, you might think that we should discuss security taxes or supply inflation and other options today to protect the long-term sustainability of Bitcoin-of course, we should not consider them until it proves to be a problem. . But even if this is not communicated anywhere, I think most people’s initial reaction to such discussions is that they think they are slippery.
A slippery slope means that a series of innocuous events may lead to some ultimately very bad changes, such as the slow erosion of the anti-inflation value of Bitcoin. In order to prevent the occurrence of the landslide, Bitcoin players created the Schelling fence-this concept actually explains the situation we see today very well.
About Schelling Fence and Social Signal Transmission
The Schelling fence (originally proposed by Scott Alexander) refers to a credible pre-commitment made by people to defend a Schelling point of view-almost like a binding contract with oneself. Perhaps the best example that most of us will be familiar with is not even smoking the first cigarette, because you don’t know how it will affect you.
Going back to the example of inflation, the slippery argument is that if we normalize the idea of 0.01% tail inflation today, we may eventually accept the idea of 0.02% tail inflation, and so on, until Bitcoin becomes balanced. There is no difference in currency. Because we can’t believe in ourselves in the future, we promise to never even consider the idea of inflation.
These pre-commitments were created as the first line of defense against negative changes in Bitcoin, but beyond that, it has more functions.
- Users continue to send their pre-commitment signals to other Bitcoin users, both to verify that they are still on the right track, and to strengthen their mutual commitments with other tribes.
- In an attack or other bad incident, it is important that everyone has “knowing and doing one” because they have a pre-commitment about the value they want to defend and how to defend the value.
- It is of great value to make this intangible pre-commitment visible to newcomers. The more people who are not familiar with the legend and history of Bitcoin can trust the existing community to wholeheartedly defend the core protocol value of Bitcoin, the more they can safely hold and use Bitcoin.
Notes for this analysis
If I don’t mention the few precautions inherent in any such “social science” experiments, it is my negligence.
The analysis I did today is very subjective and should not be considered as representing the different views of the Bitcoin community. Most of them are not my Twitter fans.
The problem with polling current holders is that if usage really picks up, they are a minority of future users, and they may have very different views on what Bitcoin should do and Schelling’s fence. This is like saying that all people with strong liberal tendencies in the world have already joined Bitcoin, so the followers who join Bitcoin tomorrow will inevitably pay less and less attention to the ideology of Bitcoin value, and pay more attention to Bitcoin. Daily use value.
Although people are allergic to intentionism, Satoshi Nakamoto has left us a lot of “originalism” documents, what he hopes Bitcoin’s social contract is. Whether Bitcoin users stick to Satoshi Nakamoto’s plan is another matter, but the intention of its creator is at least a strong natural Schelling point.
Bitcoin is not a democratic system, and the vote of the majority is not important. Finally, most of us are here because we believe that the free market can generate better value than the government. Most of us are not smarter than the market, and ultimately we must obey the market’s requirements. Therefore, if we really end up in a conflict between two mutually exclusive core values in Bitcoin, I can imagine that most people will continue to coexist with what the market considers the most valuable (such as fork futures or prediction markets) Form) and use this as your own point of view.
Source link: mp.weixin.qq.com
